Below are the types of land titles that can be acquired in Indonesia and the parties that are permitted to acquire each of the specific titles:
- Right of Ownership (Hak Milik, or HM) – Indonesian individuals and specific Indonesian institutions;
- Right to Build (Hak Guna Bangunan, or HGB) – Indonesian individuals and Indonesian companies;
- Right to Cultivate (Hak Guna Usaha, or HGU) – Indonesian individuals and Indonesian companies;
- Right to Use (Hak Pakai) – Indonesian individuals, Indonesian companies, governmental institutions, religious and social agencies, diplomatic offices, international agencies, foreign representative offices and foreign citizens;
- Right to Manage (Hak Pengelolaan) – government institutions (including regional governments, state-owned business entities, regional government-owned business entities, PT Persero, authority bodies (badan otorita) and other government legal entities designated by the government);
- Right of Ownership over Stacked Units (Hak Milik Atas Satuan Rumah Susun, or HMSRS) – parties who are entitled to hold the land title on which the building is erected; and
- Lease (Hak Sewa) – Indonesian individuals, Indonesian companies and foreign parties.
In addition to these primary and secondary titles, in Indonesia (particularly in rural areas) there exist large areas of land that have not been registered and certificated under the Agrarian Law. The rights to this land are still governed by adat (customary) law. Adat rules vary significantly from one area to another.
This “uncertificated land” can also be acquired. In this case, the buyer must apply for a registered title pursuant to the Agrarian Law and obtain a formal certificate of title. To obtain a land certificate, adat-based proprietary rights must be relinquished by the original owner to the state by signing a Right Relinquishment Deed, known in Indonesian as a Land Relinquishment Deed (Akta Pelepasan Hak, or APH), in favor of the buyer.
This first appeared in the Chambers Real Estate 2019 Guide, published by Chambers and Partners. You can find the full chapter here.
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